Bad debt, slowing economy hit Suncorp Metway

Suncorp Metway has become the latest Australian bank to warn the slowing economy and rising bad debts are eating into its profits.

Transcript

TICKY FULLERTON, PRESENTER: Suncorp Metway has become the latest bank to warn that the slowing economy and rising bad debts are eating into its profits. The company announced it was planning to take a first quarter impairment loss of $73 million and that it was considering reducing its dividends. The news spooked investors and the shares in the country's fifth biggest bank closed three per cent lower at $6.70. Wasn't all bad news, with Suncorp raising the profit forecast for its banking division. But, the company also warned claims from the recent storms in Queensland will cost it over $150 million. While a competitor, Insurance Australia Group, is expecting to pay out around $70 million. IAG today also announced details of a $170 million joint venture into the fast growing Indian insurance market.